Overall, they will show a labor market that continues to recover from the Great Recession. At the same time, a lack of progress on a number of fronts will suggest some serious longer-term problems, which existed before 2008 but were exacerbated by the recession and the slow (though steady) recovery since then.
First, the good news: The U.S. unemployment rate will have dropped by nearly a full percentage point this year and will be at or near 5 percent, which historically has indicated an economy close to full employment. Payroll job growth will show a solid rate of nearly 240,000 per month, or nearly 3 million new jobs for the year. Other measures of labor market activity – such as the numbers of long-term unemployed workers and those working part-time for economic reasons – will show improvement this past year as well.
But we will see little progress on two crucial measures: labor force participation and average wages. The nation’s labor force participation rate, at or near 62.5 percent, will remain about 4 percentage points below its recent peak in 2006. Of course, we always knew that Baby Boomer retirements would drive down this number, but retirements account for only about half of the total decline in work activity over the past decade.
In fact, labor force participation among those below age 65 (or even 55) has recovered very little since the Great Recession ended, and its decline reflects a longer-term decrease for some groups – most notably, less-educated men. Their declining work activity reduces income not only in their own families and communities, but also shrinks the productive capacity of the economy as a whole.
Chosen excerpts by Job Market Monitor. Read the whole story at The 2015 job market: Continuing recovery, ongoing problems | Brookings Institution